Transcript of the IMFC Press Briefing
IMF News, April 8, 2021
Source details
- Canonical URL
- Transcript of the IMFC Press Briefing
Other formats
Bibliographic details
- Published: April 8, 2021
Meeting overview and leadership
- Date: April 8, 2021
- Speakers: Magdalena Andersson, Chair, IMFC; Kristalina Georgieva, Managing Director, IMF; Moderator: Gerry Rice, Director, Communications Department, IMF
- Format: Virtual press conference following the IMFC meeting; communiqué released to membership.
Key substantive findings and assessments
- Global outlook and recovery
- The global economy is recovering faster than expected compared with six months earlier, but the outlook remains clouded by high uncertainty and uneven economic activity within and across countries and by climate‑related challenges.
- The IMFC emphasized calibrating macroeconomic policies and strengthening concerted action to secure a durable exit from the crisis.
- Vaccination and health priorities
- The IMFC stressed accelerating production and affordable distribution of vaccines to all across the globe.
- Prioritizing health spending and assistance for the most vulnerable is essential to global economic recovery; this requires strong international cooperation.
- Support for vulnerable countries
- The IMFC expects support for comprehensive action to meet critical financing needs of the most vulnerable countries.
- Vulnerable groups explicitly noted include low‑income countries, middle‑income countries with high social vulnerability, and small island states that are tourism dependent.
- Debt transparency and relief
- The IMFC agreed to continue strengthening debt transparency practices and support efforts to maintain debt sustainability.
- It welcomed the extension of the G‑20's DSSI and ongoing work on the Common Framework.
- Supported exploration of measures to reform the IMF's Poverty Reduction and Growth Trust and to secure contributions to the final tranche of IMF and World Bank debt service relief possible through the Catastrophe Containment and Relief Trust.
Special Drawing Rights (SDRs)
- Mandate and proposal
- The IMFC called on the IMF to make a comprehensive proposal of a new $US650 billion allocation of Special Drawing Rights while enhancing both transparency and accountability in reporting the use of these SDRs.
- The IMFC asked the IMF to continue to explore voluntary post allocations of SDRs from members who do not need them to other members who need support in their recovery efforts.
- Purpose and expected impact
- The proposed $US650 billion allocation would provide a substantial liquidity boost to all members, especially the most vulnerable.
- The IMFC and IMF leadership described the allocation as historic and as the largest boost of reserves the membership has given the Fund a mandate to follow on.
- Implementation and next steps
- The IMF will step up transparency and pursue innovations to enable better‑off members to allocate SDRs for the common purpose of aiding vulnerable members.
- IMF leadership expects to provide updates in the coming months on progress toward implementing the mandate.
Quota review and IMF resourcing
- 16th Quota Review
- The IMFC is at the beginning of work for the 16th Quota Review; members have until December 2023 to complete this work.
- Broad engagement across membership was noted; objectives include better representation, inclusiveness, legitimacy, and adequate resourcing of the IMF within the global financial safety net.
- Both Chair and Managing Director emphasized complexity but expressed encouragement that a resolution could be achieved.
Climate change, digitalization, and macrocritical risks
- Role of the IMF
- The IMFC supported the IMF stepping up its work to help members identify and manage macrocritical implications of climate change and areas such as digitalization, inequality, and fragility.
- Climate risks are growing and are substantial for macroeconomic and financial stability; climate action can generate green growth and green jobs.
- The IMF will integrate climate issues into policy engagements, financial stability assessments, macro data work, and capacity development.
- Specific initiatives and options
- Exploration of green debt swaps and connecting debt relief to environmental objectives were discussed as potential contributions to climate finance.
- The IMF will work with the World Bank and other partners to advance options—by COP26—for tools that could facilitate climate finance and support accelerated green action in developing countries.
Support for middle‑income and emerging markets
- IMFC emphasis
- Middle‑income countries featured prominently, with three discussion dimensions: accelerated access to vaccines; recognition that some are more severely impacted (including tourism‑dependent small island states); and elevated debt vulnerabilities in some.
- The new SDR allocation was identified as an important support element for both middle‑income and low‑income countries.
- Spillovers and U.S. growth
- IMF projection cited in discussion: US growth of 6.4 percent for 2021, higher than the average for the world for 2021.
- Strong US growth is expected to generate demand for goods and services globally, especially for neighboring economies, but could lead to faster normalization of monetary policy with potential spillovers. The Fed has committed to communicate well in advance and clearly.
Cooperation among major economies
- United States and China
- The recovery is increasingly powered by the United States and China; both economies are contributing positive spillovers.
- China expressed support for IMF work on climate and is pursuing net zero emissions by 2060; the current decade is crucial to meet that objective.
- IMF engagement areas include fiscal policy (including carbon pricing), monetary policy, and financial stability regarding climate‑related risks.
Meetings and operational notes
- Meetings format
- Baseline planning for Annual Meetings in October 2021 is for in‑person meetings, subject to pandemic developments and safety considerations.
- Virtual meetings were acknowledged as effective but lacking informal corridor interactions.
- Timeline highlights
- 16th Quota Review completion target: December 2023.
- COP26 referenced as a milestone for advancing joint IMF–World Bank options on climate‑linked debt instruments.
Closing messages and mandates
- Overarching themes
- Strong, enhanced commitment to multilateral cooperation to address common problems and return the global economy to sounder footing.
- Agreement to work together to end the pandemic and secure a strong, inclusive, and environmentally sustainable recovery.
- Mandates given
- Clear mandate for the Managing Director to work on the new SDR allocation and on options to redistribute unused SDRs to countries in need.
- Direction to step up IMF work on climate change and on assisting members with macrocritical climate and digitalization issues.
- Repeated priorities: vaccination, support for the most vulnerable, debt sustainability, and climate action.
Transcript of the IMFC Press Briefing, April 8, 2021 — IMF Communications Department